High End Luxury Cars

Comments

As to marque or brand... it is MB fanatics that always uses this to trump Lexus, claiming that MB's prestige and marque justifies its lofty price, and the breadth of MBs offerings especially in the higher end where Lexus doesn't even compete, makes MB the marque brand. So now, we get Merc1 accusing Lexus owners of being snobbish... what an idea !!! What would you consider all these talk about MB being a higher brand, higher status than Lexus ? What is that if not snobbish

This because Lexus fanatics constantly say that prestige doesn't matter until somone mentions Acura or Infiniti. You know like in your defense of the IS350 on the other boards. Lexus can charge more because of this and that. Does that ring a bell? I didn't say Lenn was a snob, I said that was a snobbish remark and that there was far too many assumptions going on with that remark. I can't help it that Lexus fans judge everything by sedan standards and try to ignore other cars that MB and BMW make.....that are part of the mistique also.

What would you consider all these talk about MB being a higher brand, higher status than Lexus ? What is that if not snobbish?

I'd call it a fact, or pointing out the obvious. Nothing different than what Lexus defenders do when talking about Lexus in relation to Acura and Infiniti. Lexus having more prestige than Acura or Infiniti is a fact isn't it? Yep.

and then you try to rub it in that buying a luxury car is itself an act of snobbery ! Wonder why you drive a BMW and not a Kia ?

It appears you read my post but did not understand the following:

Buying a luxury car is not an "act of modesty" nor an act of "being stuck up"!

Matrix which began life in the spring of 2002, 3+ yrs ago is not a car to be called renowned in anything, maybe cargo space.... Then you turn it around like my Matrix experience is already a myth about Toyota reliability ?

Accoriding to the passages of the "Lexus Bible" called the Consumers Report--the Toyota Matrix is as reliable as any Lexus! You know that same book that you use to bash German brands!

I have, thats the car I was talking about. The interior is not vastly improved. Its marginally better, but the only really noticable thing they changed is the black plastic of the center stack to a glossy black plastic. It definitely handles better than the previous car, but thats not saying all that much. The A8, 7, Maserati, and the new S will easily beat it in the handling department, regardless of how much they outweigh it.

I was not amazed by its luxury, most likely because I've driven XJ12s, and remember what true Jag luxury used to be.

Just like any other purchased brands, like Jaguar, Bentley, etc. the buyer gradually milks it dry, it may even turn a profit once in a while, like the zombie that rises every 10/31. Economic cycles are such that every decade or so, even the most atrociously run car company and most outrageously priced cars have worse economic excess/inefficiency to exploit. In case you are wondering, I bought mine during the fire sale after 9-11, for the price of a Saturn L series plus a song, it was a good deal, especially considering the additional safety features. Over the past few years, the rest of the industry caught up on the deep discounting, so it's no longer a relative value proposition, IMHO.

Just as financially strapped GM sold its share of Subaru ownership to Toyota there are rumors that GM may consider a sale of Saab. The most likely buyer is Nissan/Renault!

Saab with only 126K worldwide sales is known to be the most popular vehicle among academics and journalists. Is such a narrow niche worth exploiting?? I guess such a niche is worth exploiting with platform sharing and I do know there are large number of potential platforms from Nissan and Renault that can be share with Saab .

IMO it certainly beats the idea of Cadillac/Saab or GMC Truck/Saab platform sharing!

I can't find this on the CR site, maybe I'm just not looking in the right place, but the WSJ today says:

The reliability of vehicles from Nissan Motor Co. took a tumble in a new Consumer Reports annual survey, with four out of the five vehicles produced at the Japanese auto maker's newest Canton, Miss., plant making the dubious list of vehicles with worst predicted reliability....

The survey also didn't bode well for European auto makers, which didn't have any vehicles among the most reliable, or domestic auto makers, which only had two in the top 31 vehicles in the influential survey. Of the worst 48 vehicles: 22 were domestic and 20 from Europe....

Of the top 31 most reliable vehicles, 15 were from Toyota and Lexus and eight were from Honda. The most reliable 2005 model? The Toyota Prius hybrid car, with only 4% of drivers having to take the vehicle into the dealership for service. The Infiniti QX56, that line's biggest SUV, was at the bottom of the list, with 40% of owners having to take it in for repair. Toyota also did well with older models. Its Toyota Tacoma was the most reliable 1998 model-year vehicle (as well as 1999 and 2000 model years), with fewer than one in four customers needing to take it in for repair during the previous year. Volkswagen AG's Passat sedan, with a 1.8-liter turbo engine, was the worst performer for the 1998 model year: Some 72% of owners had to visit a mechanic for repairs....

David Champion, who heads the auto test center for Consumer Reports, said the domestic auto makers generally are making strides in improving short-term quality issues. But as vehicles age, domestics start to have more problems than Toyota and Honda. "They're closing the gap in the newer years," Mr. Champion said. "The long-term durability is not as good."

The most common question he gets, he says, is for a safe-car recommendation. Though it varies by size and class, he says, the Toyota Corolla with optional side airbags and electronic-stability control is his most-affordable pick.

For what it's worth, Saabs are acrually among the most reliable European brands in recent years, ahead of Volvo, Mercedes, VW, Audi and BMW. If and when combined with heavy GM subsidy, they actually make for good deals if you like European cars. When I bought my '01 9-5 wagon, even loaded it was priced comparable to the Mercedes C230 4-banger hatchback; nowadays however, GM is not subsidizing as much, the current 9-5 wagon is a few grand more than the V6 C230 sedan, making the Saab not such a screaming deal as it was any more.

There used to be a joke that went something like this: GM finanlly gets the car right after a few model years, then promptly completely redesign the model. The company may have taken the implied advice too far in this case ;-)

Yeah... I sure would love to be in that bracket. I am pretty sure I would buy a used Lamborghini Diablo if I were making $500,000/year, I won't drive much, and since it's used, payment should be lower.... I can still dream!

On the off topic:

Most of these super jumbos are actually owner occupied, because in reality, it doesn't make sense to spend $2mm on a property and rent it out, depending on how much you borrow, your rent would have to be $11,000 just to cover basic costs, and if you can afford to fork out $11,000 a month on rent, you would be crazy not to buy.

Also, lenders are very careful with flippers, if we were to buy a $2mm loan, we want to see at least a 1 year prepay on it, if not 3 years. If the loan is $2mm, we'll probably pay $2,030,000 to $2,060,000 for the loan ,and that does not include the cost to securitize the loan and sell, the commission for my boss, for me , the salary for our auditors, funders, and underwriters. If the borrower flips, we'll be in the red pretty fast. Of course, it still happens (sometimes quite a bit), but we're usually pretty careful with flippers.

A lot of these high end Option ARM borrowers know how to manage their money well, they usually have their own business and they would rather have a negative amortizing loan than having a commercial line of credit in the 8-9% range. I think this is a good program if you know how to manage your money. If not, 30yr fixed is the conservative way.

I've read your posts with interest. Unfortunately, I think that your perspective is a little skewed because you are in the loan business, not the investment business. Most of your loans are going to people who, to be kind, are all flash and no cash. People who live from paycheck to paycheck, no matter how big. Mortgage bank people rarely see the very successful who pay cash. (Most "good" buildings in NYC won't even consider a coop applicant who needs more than a minimal mortgage.)

I think that the superluxes like a Gallardo are bought by people who pay cash. Entrepeneurs, not salaried people, no matter how high the salary, or Wall Street types with a low base salary and a 7 digit bonus every year.

I could be wrong though because I do think that there is a high turnover in these vehicles which suggests that some of the buyers are leasing them and might quickly tire of the payments.

No, you're not wrong, blck. People who buy Gallardos DO pay cash, or at best, they lease 'em. Nobody finances them. If they did though, even an DTI of 70% would mean nothing on those incomes, where they have $100,000 discretionary income each month. That's the fallacy of DTI. You have to overlook it after a certain point.

It's true that we don't see the ultra riches (BTW- we buy loans as an investor... we're not the direct lender, we're actually in the investment business of loans.. or Mortgage Backed Securities), I am sure not just the Forbe 400, probably top few thousand could afford to pay cash to buy multi-million dollar properties if they so wish. However, majority of the "poor millionaires" still have to get a loan, even if you make a few million dollars a year, unless you're buying a small house, you will probably get a loan. Not to mention all these millionaires tend to be savvy investors in residential real estate, commercial properties, or small businesses. They might have a lot of equity, but their cash reserve is low, hence the need to get a loan.

We do buy a lot of loans from $3mm to $10mm. As a matter of fact, even if you could pay cash, a lot of these ultra riches would rather get a loan. We've bought a $6mm loan, the borrower was a prince from the Middle East, I am sure he could've paid cash, but he's not. And really, it makes sense. Just like I mentioned, a lot of these ultra riches have their own businesses, the current prime is almost 7%, with a 2% margin and you're looking at a 9% commercial line of credit. It makes more sense to have a real estate loan around 6%.

I don't think Gallardos are mainly bought by people that pay cash, because it's relatively affordable compares to most exotic models. I am sure people who buy the Veryon or the Enzo pay cash, but Gallardos, Continental GTs, are still affordable to people that are not on the Forbes 500. Of course, I am not in the car business, I don't know if this is really the case. I do know one person who makes a bit less than $2mm/year, who almost bought a Gallardo (ended up with a Flying Spur), would've financed it.... in between his loans, he would like to have cash in the bank.

BMW passes Mercedes, but Lexus looms in the mirrorIt may not seem like a big deal over here, but Germany's BMW group expects to sell more vehicles than the Mercedes car group this year. If BMW comes out on top, it will be the first time in a decade.You can expect to hear some chest-beating from BMW execs in Munich. But there's no telling how long the Bavarian automaker can keep the crown if Dieter Zetsche recharges Mercedes.And then there's Lexus.BMW and Mercedes execs underestimated what Lexus could do in the United States, but they're not likely to make that mistake again in Europe or anywhere else.Even so, it won't be long before it's a three-way race.

Yeah I noticed you had a Saab so I thought I'd ask. I've liked the current 9-3 since it came out and I was shocked by the prices I could get one for. This new turbo V6 Aero model is interesting, but.....

IMO it certainly beats the idea of Cadillac/Saab or GMC Truck/Saab platform sharing!

Yeah it does. GM should be ashamed of themselves for doing that to Saab. Every other car company around that owns a little European brand has done a much better job than GM has with Saab. I haven't seem anything so ridiculous in my life. Who did they think they were going to fool with such a lame reskin? What is truly sad is that some people don't know the difference.